Rs 12000 Crore to be Infused into the Market by RBI

The Reserve Bank of India is to infuse 12,000 crore in to the market in the later phase of the week by making a purchase of government securities.

“Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the RBI has decided to conduct Open Market Operations (OMOs) by purchasing the following government securities for an aggregate amount of Rs 12,000 crore on May 25, 2012,” said a statement issued by the bank.

Government securities that mature in 2020 will be purchased by RBI, as part of the OMOs. This has an interest rate of 8.19%. The securities that mature in 2024 will have 9.15%, those in 2027 8.26% and 2030 8.97%. The statement has notified that the auction that would be would be a multi-security auction, using multiple price method.

Last week, the RBI pumped in Rs 11,128 crore into the system through OMOs as against the previously notified amount of Rs 12,000 crore. The OMOs tool was used by the Central Bank. Under this, the government securities from banks are purchased. Securities from other institutions are also purchased to improve liquidity situation.